Blue Ocean Saga: Issues raised on banks’ onboarding procedures
View(s):By Duruthu Edirimuni Chandrasekera
Earnest questions are being raised about the Know Your Customer (KYC) procedures of reputable entities on UK-based Blue Ocean Securities, currently embroiled in a stock trading scandal.
The Securities and Exchange Commission (SEC) issued a warning to the public of a scam by this company noting that it is not licenced by the SEC and has no authority to trade in securities on behalf of investors.
The company had lured their customers to deposit money in certain accounts, raising serious questions about the relevant banks’ procedures in onboarding customers.
The Sunday Times Business learned that the case has been handed over to the Central Bank along with the Criminal Investigations Department. Informed sources stated that authorities are also investigating information from the Immigration Department, as foreigners were allegedly involved in the scam. Additionally, the Computer Crimes Investigation Division is also looking into the matter.
Analysts noted the incredulous nature of this scam, saying that the gullible nature of the average investor is still prevalent despite widespread information at their fingertips. “The first thing in stock trading involves opening a Central Depository Receipts or CDS account. One cannot trade with a simple bank account. And they (investors) should have verified before joining this scheme,” one analyst said.
The SEC has issued a clear warning regarding the dangers of unsolicited investment suggestions received through various online platforms such as SMS, WhatsApp, Facebook, and YouTube. Recent media advertisements from the SEC have highlighted the dangers posed by unqualified “advisors” who take advantage of vulnerable individuals, enticing them into high-risk investments or fraudulent schemes.
“Promoters of such schemes repeatedly take advantage of individuals’ financial desperation and their limited understanding of regulatory frameworks. They create a facade of legitimacy through their online presence, which can lure unsuspecting individuals into high-risk or fraudulent investment opportunities,” a second analyst said.
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